The youth hostel market - Italy

1.2 A global market and a European mindset

Phocuswrite estimated the value of the global hotel market in **** at about USD *.* billion. This figure is expected to reach about $*.* billion in ****, with projected growth of ** per cent.

Revenues for hostels World, ****-****, millions of USD Source: ****

According to the **** annual report of Hostelling International Europe has the largest number of hostels per region - with more than ****. In ****, Europe and Asia accounted for nearly two thirds of global hotel revenue

1.3 An even smaller Italian market

The Italian market for the hostels is still quite small. However, the whole sector of accommodations, hostels included, represents a significant part of the Italian GDP. Indeed, in the last years this sector increase:

PIB direct généré par le tourisme Italie, ****, **** et ****, en % Source: ****

Italian hostels in the pipeline

The hostels originate from Germany, as the number of facilities is extremely high in this territory compared to the rest of Europe. Italy remains at the bottom of the pack, with about *** hostels in **** spread across the peninsula. The number is not impressive, although the growth is considerable: between **** and ****, these types of accommodation increased by **%

Number of youth hostels Italy, ****-****, in units Source: ****

Répartition du nombre de structures d'accueil Italie, ****, en % Source: ****

Although, as mentioned above, the growth rate has been considerably high, the number of accommodation in Italy is among the highest in Europe. Thus, a figure of about *** units is remarkably low. Compared to the overall hotel market, the weight of inns actually stands at *.**% - the lowest of all categories.

1.4 The sector in the face of crisis

The situation

The tourism is in great difficulty. A large part of the hotels are closed, for lack of customers. Italian and foreign demand is reduced for various reasons: travel restrictions, reduced spending capacity, less free time available (***), cancellation of events, reduced public transport capacity. The few hotels in activity are those that carry out public service activities, to accommodate health personnel, civil protection volunteers, the staff of the few trains and planes that still travel, people in quarantine.

According to the Federation of Italian Hotel and Tourism Associations (***).

In **** there will be less about *** million foreign presences (***).

 If we look at the entire tourism sector, the seasonal jobs at risk for summer **** are almost *** thousand.

In April, about ***,*** seasonal jobs were lost in the hospitality industry. 

A study recently published by the Bank of Italy (***) presents a decline of -**.*% or €** billion less for the Italian tourism sector for the year ****. [***].

Nevertheless, the Italian Hostel's chain "Ostelli Belli" (***), has managed to expand by creating new structures in Italy, especially in Rome and Palermo. [***].

The solutions

Accommodation facilities have the possibility of issuing a voucher as an alternative to reimbursement, in cases of cancellations. It does not require any form ...

2.1 Overview of the request

Hostels represent a relatively small share of the hotel industry. Despite their reduced presence in the world compared to other accommodation facilities (***), demand for this type of accommodation could benefit from demographic and lifestyle changes

The demand for hostels, like any other accommodation structure, is directly dependent on the following three factors

- Tourism and tourism

- Demographic data

- Overnight stay on site

Chiffre d'affaires du secteur du tourisme Italie, ****-****, en milliards d'euros Source: ****

The number of domestic and foreign tourist visits is probably correlated with the number of visits to accommodation facilities. In ****, tourism spending amounted to €** billion, of which **% was for accommodation and catering. Although the number of tourists grew by *.*% compared to ****, if we compare these figures with other European countries, they do not position Italy among the preferred destinations of internationals. In Europe, France and Spain recorded more than ** million international visits, compared to ** million in Italy. [***]

Italian price competitiveness, especially for the hostel sector, has improved compared to other European competitors (***), this has led to an increase in demand. Not least, in recent years there has been a strong interest in cultural travel in Italy.

On the other hand, **** was the first year that ...

2.2 Market Determinants

New demographics

Millennials - defined by the Pew Research Center as peopleborn between **** and **** - represent about ** billion people in Italy in ****.[***] This age group is gradually changing their means, modes and travel habits

According to Topdeck travel, **% of Millennials in the U.S. are looking for the experience of living in a new culture. More than three-quarters of them are therefore prioritizing experience over material goods - only **% prefer to party and **% prefer to shop

This is a true revolution that is affecting the hospitality and travel industry. The revolution is being driven by Millennials, who are therefore interested in aspects that are more likely to be associated with the "hostel experience" than other forms of accommodation. In fact, more than **% of youth hostel customers are Millennials.[***]

Average night

In ****, the average number of nights spent in Italy, including residents and non-residents, was *.*, although it increased significantly if you focused exclusively on non-hotel facilities, where the average number of nights per night reached *.*, an increase of *.*% during the year.[***]

Where do tourists come from?

From the latest data published by UNWTO in ****, in **** the majority of Italian tourists came from Europe. This is a consistent trend since it has been ...

2.3 Lifestyles and consumption habits impacting the hostel market

Individual travel

More and more people are traveling alone. This change is visible around the world, as traditional trips with a single destination are being abandoned in favor of short-term stays in different locations.

Evolution of the "solo travel" trend Italie, juin ****-juin ****, en % Source: ****

The solo travel trend peaked in ****, with **% of searches on this topic. However, the recent health crisis that has been characterized by several lockdowns, especially a few months before the summer season, has drastically decreased the trend of the last few years. In fact, it can be inferred that people are more reticent about travel, and especially that they prefer to share the experience with someone.

The effects of the health crisis can also be seen in ****, where research drops even more.

The graph above represents the proportion of searches for a given term in a given region over a given time period, compared to when it was most searched (***).Thus, a value of ** means that the keyword was used less often in the relevant region, and a value of * means that there is not enough data for this keyword

Over the past five years, Google's interest in the keyword "solo travel" across all categories has ...

3.1 Market organization and dynamics

Overview of the hospitality sector

The broader category of hospitality includes all types of accommodation structures, from the most numerous (***). In ****, Italy is the leading European country in terms of the number of accommodation units and second only to France in terms of the number of beds available. [***]. The North East is the area in which traditionally the largest share of Italian hospitality is concentrated.

A closer look at the youth hostel market

The position of inns among the spectrum of structures present in is different from the others, both in terms of sales performance and number of units. Although the presence of hostels in the territory has gradually increased in recent years.

The hostel market in Italy had about *** structures in ****. The majority of hostels are independently owned, there are only a few chains in the territory, which have the largest market share (***). Indeed, according to Hostelworld, Italy has achieved *th place in the world for "classified" hostels on the platform, partly thanks to the company Ostellobello.

3.2 Distribution: regional preference and booking method

Geographical distribution

Tourism and tourism

As mentioned, the arrival and overnight stay of tourists - both domestic and foreign - are directly correlated with the occupancy rate of inns.

Presence touristique par région Italie, ****, en % Source: ****

Geographically, the tourist concentration of recent years has placed large cities in pole position. The data from Istat for **** confirmed that Rome is the preferred city with ** million arrivals, an increase of *.*% compared to ****, followed by Milan, Venice, Florence and Rimini. In terms of percentage, the most significant positive changes in ****-**** were recorded in South Sicily (***). According to the Banca d'Italia the North-East micro-region has achieved better results in terms of arrivals and presence of domestic and foreign tourists

About **% of the total tourist presence in **** was concentrated in these * regions - Veneto leading with **.*%

Youth hostels

Number of youth hostelsItaly, ****

Source: ****

The majority of hostels are concentrated in the North. By ****, of the total number of registered structures (***), more than **% were located in northern Italy, while the remaining **% were located in the Centre - with *** housing units - and in the South with less than ***.

On-line booking

Hostel bookings can be made either via the internet (***) or on site

The effects of ...

4.1 From the initial offer to the luxury concept

The first youth hostel was created in Germany by German professor Schirrmann to provide his students with out-of-town housing. The facility was seen as a place where young people could sleep for little money in exchange for small hosting services

With a rapid increase - about ** years - Germany had more than *,*** such houses. Originally known as "youth hostels," the facilities had very specific characteristics: minimum age, curfew, etc.

Traditional offerings had to be updated due to changing demand. Travelers were less and less interested in sharing bunk beds in a single room with a basic bathroom - "the importance of an inn's decor is now paramount, a criterion cited by **% of today's travelers who choose this type of accommodation."[***] Though social and budgetary reasons have continued to shape the inn ecosystem over the years.

In fact, despite the transformation in the outlook and layout of inns, their offerings remain anchored to entice those seeking adventure and a social experience. Facilities have improved their offerings in terms of additional functionality, but not in terms of purpose. Today, inns are shaped by improvements in bedrooms, interior design and technological developments

In Italy, the concept of the "luxury hostel" is developing more and ...

4.2 Essential characteristics for an acceptable budget

Hostels are representative of a specific target consumer: the backpacker. [ Hostelclub This specific orientation of the target consumer is due to its positioning, the original type of accommodation was specifically designed as a social and affordable structure, where travellers can interact and share their experiences as well as the equipment

The basic offer of an inn includes

- Bed, sheets

- Bathrooms and bathrooms

- Lockers

- Wifi

- Common areas

- Bar/Coffee (***)

According to the Hostelworld In addition, the number of beds in the homes varies from * to ** for each dormitory, an average of * per dormitory; in addition, they generally have between ** and *** beds available in total.

The price is very variable, ranging from US$**.** to US$**.** (***), but most prices range from US$**.** to US$**.**. [ Backpackeurope ... There is no doubt that prices are very different in major cities, such as Paris, London or Milan. An average of $** per person per night could be a good estimate

4.3 Social networks and influence on the destination

Demographic and social changes in society have contributed to the advent and impact of social networks in the travel industry

The data shows the relevant impact of online messages on housing, location and other decisions. Instagram has indeed helped to perceive differently - through a screen - these images of places, restaurants, hotels and houses that have become a real trigger. According to research conducted by Booking.com on **,*** travellers, * out of ** choose a location based on the scenery seen before departure

These effects are due to what is called user-generated marketing. The latter refers to the ability of users to influence each other's decisions, and is particularly relevant in the travel industry. As mentioned above, millennials are typical hostel target customers, according to a survey, **% of them publish messages while travelling and **% do so once a day. [***]

Source: ****

Recent research on favourite activities on the first day of a trip has highlighted the impact of social networks and the Internet on the travel experience, not just on the pre-departure phase

A survey conducted by Dynata - formerly Research Now - among **,*** people in ** countries showed that **% of people post a photo on social media and **% check online reviews. There is ...

4.4 Alternative offers

Hostels are often included in the broad category of "other accommodation facilities", along with campsites, guest houses, agritourism and others.

Recently, the number of hotels has been reduced in favour of these alternative accommodations. In fact, between **** and ****, the number of hotels gradually decreased. In ****, the number showed a positive variation, although relatively small compared to other accommodations, particularly the category "short-term rentals". [ Euromonitor This category is mainly driven by the impact of the sharing economy on the hospitality industry.

Source: ****

When it comes to sharing the economy, the first thing that comes to mind is undoubtedly Airbnb. Italy is one of the most important markets for the company - with ***,*** ads in ****, the country is the third largest market after the United States and France. [***]  

5.1 Regional regulation

Hostels, like any other activity or company in Italy, must first comply with local standards and requirements. The space must be adapted to accommodate bedrooms, bathrooms, service rooms and all that is necessary

The classification of accommodation establishments is established in accordance with regional laws. Usually, there are three types of accommodation available: hotel, extra-hotel and outdoor.

Hostels fall into the category of "additional hotels" and their specificities are governed by regional laws. However, a few steps are necessary throughout Italy when it comes to opening an inn

- Opening of a "VAT" account

- Registration in the Trade Register, Inps and Inail

- ASL certificate (***)

- Submission of the SCIA (***) form for the start of activity refers to the act of informing the municipality of the start of the activity

It should be noted that security standards, the maximum number of rooms per space and taxation differ from one region to another.

5.2 New regulation post Covid-19: 110% for hostels as well

With the update of article *** and ***, DI **/****, converted into law **/****; article *, paragraphs **-**, law ***/****, of Budget for ****, the Italian government has extended also to hostels the possibility to benefit from the ***% bonus for the energy renovation of the structures.

In fact, hostels can be non-profit foundations or not (***) from the ***% bonus. This bonus, in addition, will apply both in the hypothesis that the property is owned, but also for those held on the basis of a lease or loan agreement, provided that the same is registered before the start of the work and that there is the written consent of the owner to carry out the work.

Another novelty for the hostel market follows the declaration of the Revenue Agency, which provides, for hostels Onlus, no limitation on the type of property. In essence, the ***% for the expenses incurred by them competes for all interventions facilitated, regardless of the cadastral category and the destination of the property subject to the same interventions.

6.1 Segmentation of actors

• Booking.com
• Generator Hostels
• PLUS
• a&o
• RomeHello
• Babila Hostel
• Anda Venice Hostel
• 5 Terre Backpackers
• HostelWorld